I wrote a small free application called CpuLimiter which allows you to limit the CPU usage for a selected virtual machine running in Parallels Desktop or Parallels Server. The download file contains two programs:

cpu-limit which may be used in Terminal as a standalone app to limit any process, not just Parallels' virtual machines.

GUI, which wraps the cpu-limit in a traditional GUI application, and is suitable for most Mac OS users.

Installation is very simple -- just double-click the CpuLimiter-0.1.zip file, and drag the application to the Applications folder, or any other desired location. To start the program, just double-click it then select a running virtual machine from list and set the CPU limit in percentage. That is, to limit a VM's CPU usage to 20%, you'd enter 20. You can start as many instances of applications as you want to handle more than one virtual machine.

Please note that at least one VM should be running, so that the application can detect it. This works in Leopard with either Parallels Desktop 4 (build 3522 or higher) and Parallels Server 3 (build 2251 or higher). This is beta version 0.1, and I welcome any bug reports.

[robg adds: I haven't tested this one, beyond downloading the zip file and confirming its contents.]

You should use kill() instead of invoking kill via system() call. The system() call needs more resources and causes overhead. It needs to fork, execute shell, and run the kill executable file. There should be many CPU usage introduced by the cpu-limit if there are many cpu-limit instances.

You can use cpu-limit from inside CpuLimiter.app->Contents->MacOS
usage is:
cpu-limit percentage(without %) process_pid
for example
cpu-limit 30 3455 (where 30 is percentage, 3455 is pid for Virtual Box VM)
Please note, I didn't test it personally, but I am working in this direction

Could you PLEASE report a snow leopard compatible build ? This app is a must.. I wrote myself a hack for dnetc (which is included in it now) to limit cpu usage based on cpu core temperature (for the original G3 at that time) and would love to see it now for Snow Leopard. If you have a working binary, please contact me to port in the option for temperature-based limiting :)